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India and Pakistan adopted a new visa regime to ease travel restrictions for their citizens in the latest step to spur regional trade and build trust.

The changes will let businessmen from both nations obtain one-year, multiple-entry visas, while people over 65 will be issued with travel permits at the main border crossing point between the two countries. The agreement was signed by visiting Pakistani Interior Minister Rehman Malik and his Indian counterpart, Sushil Kumar Shinde, in New Delhi today.

The pact is part of an effort by the rivals and neighbors to rebuild ties shattered by the attacks on Mumbai in 2008 by Pakistani gunmen, in which 166 people died. Peace talks between the countries, which have fought three wars since independence, resumed last year. Pakistan’s cricket team will this month begin its first tour of India since the guerrilla raid on India’s financial center.

Pakistan confirmed India’s so-called most-favored nation status in March, giving its neighbor equal standing in international trade by removing non-tariff barriers, lowering customs duties and raising import quotas. India gave Pakistan that status in 1996. Pakistani restrictions on the import of more than 1,200 items are scheduled to end this month.

India last month executed Mohammed Ajmal Kasab, the only gunman detained alive during the terrorist strike, which the government in New Delhi said was carried out by the Lashkar-e- Taiba group.

India says a return to normal relations depends on a successful probe of those who plotted the raid. After initial denials, Pakistan acknowledged the Mumbai attack was planned on its soil and has put some Lashkar members on trial.

Border, currency

The agenda for the ministers’ talks in New Delhi includes counter-terrorism, management of their border, fake currency movements, and cooperation among security and investigation agencies, India’s home ministry said in a statement.

Both sides will now grant group tourist visas for the first time in their histories, according to an Indian government statement. The relaxation of visa rules will make travel easier for Indians and Pakistanis who migrated at partition in 1947 and are keen to visit ancestral homes.

India will give 3,000 visas to ordinary Pakistani fans and additional 300 permits to dignitaries to enable them to attend the cricket series that starts Dec. 25, the government said in parliament this week.

With assistance from Santosh Kumar in New Delhi. Editors: Mark Williams and Arijit Ghosh.

To contact the reporter on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net. To contact the editor responsible for this story: Hari Govind at hgovind@bloomberg.net.

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